Entrepreneurship class case
Analysis of Key Issues
TOP ISSUE #1: THE FREQUENT CHANGE IN TOP LEADERSHIP THROUGH THE YEARS
Consideration: Due to Steve Jobs leaving Apple initially for health reasons, outside leadership had to be brought in to efficiently run the company. In response to the constant executive change from Jobs to Sculley to Spindler to Amelio back to Jobs, the company had endured several cultural and business-focus shifts.
For example, while Sculley was in reign, the Research and Development sector of Apple was at a high 9% of sales, while competitors ranked in at 1-5%. Apple at this time was considered highly “over-priced”, which Sculley tried to alter to bring Apple into the market as the low-cost producer of computers with mass-market appeal. This strategy changed the look of Apple to the consumer base, but attempted to compete with the lower priced IBM clones.
Another example of moving the company into another light was with Amelio taking the CEO position, who promised to bring Apple back into the industry with its original premium-priced differentiation strategy.
The issue I found with the cultural and constant shifts in strategy every time a new CEO would take control, is the lack of consistency not only within the organization, but to the end consumer. Apple stood for innovative technologies that came at a premium price point because of the target market they were seeking. When this strategy changed on a dime, consumers are led to have a confused or altered perception of what the company stands for, involving the brand image and brand recognition.
Action: Create a strong enough company culture and clear message to portray to the public, regardless of where the next CEO takes the company under his/her control. Even under new leadership, a strong company should still stand and stay true to its mission statement. The Pros of this would be the ease of transition into new leadership as well as allowing the consumers to remain true to the Apple products and brand as an entirety. The cons however would entail that this idea of staying true to a company culture is an easy task when a new leader comes in and wants to make their mark on the company, which is not necessarily an “easy” task.
TOP ISSUE #2: STAYING INNOVATIVE IN THE EVER-CHANGING TECH INDUSTRY
Consideration/ Take-away: Another key issue of this case was the fierce competition that Apple was constantly faced within in the marketplace. According to exhibit 6 in the case, in a worldwide market share comparison, Apple is ranking in at a low 4.2% comparative to the top Hewlett- Packard (20.3%) market share in 2009.
Action: While global competition is high, the new launch of technologies is essential to keep the company in the spotlight. Therefore, in order to be faster to market than outside competition, the
company needs to focus its resources on R&D and also generating a quick to test and quick to market strategy. If the company takes its time in testing new, innovative products, the marketplace will change and competition will be able to launch the “next new thing” faster. Apple was also the first mover in a lot of aspects. In the tech world, being the first mover certainly has its pros for example establishing high returns and setting the bar for the competition. While the cons may include high risk and any type of backlash from the customer base, I believe putting additional resources to improve R&D is appropriate especially within this specific industry.
Perspective of the Company CTO
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